5 Benefits to Performing a Quantitative Schedule Risk Analysis
There are two primary types of risk analysis: qualitative and quantitative assessments.
- A qualitative assessment is an evaluation that relies on the experience and knowledge of key project stakeholders to identify items that have the potential to impact the schedule. A qualitative assessment involves evaluating an order of magnitude of those impacts and assigning a probability of occurrence. This type of assessment is typically managed via the project risk management plan and risk register.
- A quantitative assessment makes use of probabilistic analysis techniques such as the Monte Carlo simulation method. The process requires building a logical activity network model where risks are identified from a variety of sources. The schedule model is subject to simulation through multiple iterations performed with a random activity duration selected from a predefined distribution.
5 Quantitative Assessment Benefits
As with any analysis, the output is only as good as the input. We cannot stress enough the importance of spending the time upfront to develop a sound logic network with a good basis document. This will pay dividends at the end of the SRA process.
In our experience running several schedule risk analysis on different types of projects, we have found there to be 5 valuable benefits to going through the quantitative risk assessment process.
1. Defining the Probability of Success
A schedule risk analysis helps to establish a confidence level among the team in the overall project execution plan.
2. Identify High-Risk areas
A risk analysis helps highlight the highest risk areas in the project schedule and execution plan. Typically this helps project management focus key resources where attention is needed.
The initial risk assessment provides a good list of high-risk schedule areas. Once identified, the process forces the project team to think ahead and develop mitigation plans to be monitored on an ongoing basis. The model also provides a platform that the planner can use to analyze the impact of the mitigation plans and execution changes in the future.
4. Ongoing Risk Management
The time spent on building a good schedule risk model typically augments the existing project risk management plan. Building in periodic schedule risk reviews helps the team continue to be involved in the risk management process and provides a continued assessment of the overall confidence level in project success.
5. Improve Client Confidence
The process is a good way to leverage client confidence in the project schedule completion date and support business development needs. A proactive risk management plan helps assure clients that you are looking ahead and ready for any potential impacts.
Read more Nexus Insights.
- My Rock Bottom and Rewiring: An Entrepreneur’s Journey to Positive Mindset - January 28, 2021
- For a Successful Company Culture, Aim for Better, Not Best - November 12, 2020
- Small Company Insights to Consider for Resiliency in the Fourth Industrial Revolution - September 10, 2020